Music /Real Estate Notes PSI Exam Prep: General Principles of Agency Part 1
it is someone who uses or purchases a product or service.
A consumer
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Key Terms
Term
Definition
it is someone who uses or purchases a product or service.
A consumer
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it is someone who’s working with a real estate licensee but who isn’t represented by that licensee (nor owed the full range of agency responsibilities)
A customer. the customer may or may not be represented by another licensee.
it is usually the party to the transaction who is represented
A principal (the client)
it is someone in a position of trust who owes loyalty to another.
A fiduciary
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it is someone who acts on behalf of someone else.
An agent
he/she has broad authority to act for the principal, such as someone who has power of attorney.
A universal agent
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| Term | Definition |
|---|---|
it is someone who uses or purchases a product or service. | A consumer |
it is someone who’s working with a real estate licensee but who isn’t represented by that licensee (nor owed the full range of agency responsibilities) | A customer. the customer may or may not be represented by another licensee. |
it is usually the party to the transaction who is represented | A principal (the client) |
it is someone in a position of trust who owes loyalty to another. | A fiduciary |
it is someone who acts on behalf of someone else. | An agent |
he/she has broad authority to act for the principal, such as someone who has power of attorney. | A universal agent |
she/he has limited authority to act on a client’s behalf, such as a real estate agent or an escrow officer. This type of agent can’t bind a client to a contract. | A special agent (aka limited agent) |
she/he is responsible for handling all dealings in a given area for a client, such as a property manager. This type of agent may bind a client to a contract. | A general agent |
it is when a licensee represents one party, either the buyer or the seller, in a transaction. it don’t permit licensees to engage in dual agency, even if the state permits it. | Single agency |
it is the representation of both the buyer and the seller in the same transaction. | Dual agency |
it is when a single licensee represents both the buyer and the seller in the same transaction. | Single licensee dual agency |
it is when two separate licensees from a single firm each represent one party (buyer or seller) in the same transaction. | Designated/appointed agency (aka dual-licensed dual agency) |
What are the two duties almost impossible to deliver in a dual agency situation? | Loyalty and confidentiality |
a licensee who provides real estate services to a buyer while actually representing the seller in a real estate transaction. | Sub-agent (sub-agency) |
the licensee doesn’t represent the consumer in an agency capacity but instead provides non-agency assistance that doesn’t require the licensee to exercise judgment or discretion | Non-agency relationships |
What are other names for non-agency relationship? | transactional or facilitator roles |
What are the 6 fiduciary responsibilities a licensee have? (OLD CAR) | Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable skill and care |
it means following a client’s lawful instructions. Licensees may not obey a client’s illegal or unethical instructions. | Obedience |
it means putting your client’s interests ahead of others, including your own. It also means working in the client’s best interests. | Loyalty |
any information that could harm your client’s negotiating position in a transaction. This includes your client’s motivations, time frames, willingness to settle for terms/price other than those offered, and any other information your client deems confidential (unless disclosure is required by law). | Confidentiality |
it means that you must disclose to your client any facts that are relevant to the transaction (aka material facts; e.g., any information, including agency-related information, that might have an impact on the transaction). | Disclosure |
it means proper handling of client property, which includes keys, funds, paperwork, and the property itself. This means no commingling or conversion of the earnest money, among other requirements. | Accounting |
it requires agents to operate within the scope of their expertise and advise clients to seek expert advice on matters that are outside of the agent’s scope of knowledge | Reasonable skill and care |
What are the two duties that continues even after the agency relationship terminates? | Confidentiality and Accounting |
is an agency relationship that’s understood and agreed to by the parties. Spoken or written words create this agency. | express agency |